Homes Are Where the Gains Are — Thursday’s IP Market Recap

by Kyle Woodley | December 29, 2011 4:53 pm

[1]A number of housing stocks caught fire Thursday on better-than-expected homes data, helping send the S&P 500 back to positive territory on the year. The benchmark index has one last trading day to determine if 2011 will be punctuated with black ink or red.

Pending home sales for November were up 7.3% month-over-month vs. a much more cautious 1.5% forecast. Sales also were 7% better than the same period a year ago and now are at their highest point since April 2010.

Homebuilding stocks responded with a resounding rallying cry. KB Home (NYSE:KBH[2]) was up 6.15%, PulteGroup (NYSE:PHM[3]) gained 6.05% and Lennar (NYSE:LEN[4]) climbed 4.64%. Home improvement product maker Masco (NYSE:MAS[5]) jumped 8.41%, while home improvement retailers Lowe’s (NYSE:LOW[6]) and Home Depot were up a more modest 2.47% and 1.16%, respectively.

Joining in Thursday’s revelry for different reasons was Diamond Foods (NASDAQ:DMND[7]). Shares soared 7% on rumors that hedge fund manager David Einhorn might have invested in Diamond Foods. The move is a much-needed breath of fresh air for DMND shareholders, who saw their investments lose as much as 60% since initial reports came out concerning Diamond’s accounting practices. However, the stock is up in double digits for December, including some wild mid-month gyrations[8].

Boeing (NYSE:BA[9]) could declare 2011 the “Year of the Deal” after Thursday, when the U.S. government agreed to a large aircraft sale to Saudi Arabia, which will include 84 new Boeing-made F-15 combat jets. The contract, worth almost $30 billion, also will task the company with bringing 70 existing aircraft up to date. Boeing stock budged just more than 1% Thursday but is up almost 20% in the past three months as the company has announced record-breaking deals[10] with Southwest (NYSE:LUV[11]), Emirates and Indonesia’s Lion Air airlines.

Three Up

Owens Corning (NYSE:OC[12]): Up 7.21% ($1.95) to $29.

Elan (NYSE:ELN[13]): Up 5.64% (74 cents) to $13.86.

Bank of America (NYSE:BAC[14]): Up 3.21% (17 cents) to $5.46.

Three Down

Deckers Outdoor (NASDAQ:DECK[15]): Down 8% ($6.76) to $77.69.

Groupon (NASDAQ:GRPN[16]): Down 5.48% ($1.24) to $21.38.

Fusion-IO (NYSE:FIO[17]): Down 4.71% ($1.20) to $24.26.

As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps[18].